Business Fraud: Pyramid Schemes, Tax Fraud and Money Laundering

Ponzi Schemes also known as a multi-marketing organization are white-collar crime; it is essentially an individual swindling a quick investment from new investors. Always ends up with investors or victums losing “their shirt” all the profits and many cases the company and is bankrupted and the owner ends up in jail. Two very highly successful Ponzi schemes are Primerica group and Amway. Primerica Group sells insurance and financial services and Amway sells heath insurance, but it doesn’t matter what they sale, its all about recruitment. They take your hard earned money and invest it into there business for a bigger profit in the future for a retirement but many people who try to get some of there money back for emergency are sadly mistaken

Describe a Ponzi scheme. Find several examples of other Ponzi schemes that have occurred in recent years.

card fraud. In reference to money Laundering we will the complex process of how criminals

(TCO 5) Fraud is an intentional misrepresentation of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. In our readings and discussions we have seen several examples of fraud in business. Using that experience (1) provide an example of a common fraudulent practice in business with an explanation of how the practice works and (2) name and describe each of the elements of the Fraud Triangle.

Unfortunately, a quick scan of the business news will normally result in reports of unethical business behavior. To prove this point, let’s start with a review of the news for stories about fraud and other unethical behavior in business. You can use the University Library to start your search. Once you have located an article share it with the class by developing a summary of the important information. Make sure that you give credit to your source.

In fraud committed against organizations, the victim of fraud is the employee’s organization. In frauds committed on behalf of an organization, executives usually are involved in some type of financial statement fraud; typically, to make the company’s reported financial results appear better than they actually are. In this second case, the victims are investors in the company’s stock. A third way to classify frauds is via the use of the ACFE’s occupational fraud definition, “the use of one’s occupation for personnel enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets” (ACFE, 2010). The ACFE includes three major categories of occupational fraud: asset misappropriations involves the theft or misuse of the organization’s assets, corruption involves the wrongful use of influence in a business transaction in order to procure benefits contrary to their duty to their employer, and fraudulent financial statements involving falsification of an organization’s financial statements for personal gain.

Another source of a great amount of fraud is the fact that a lot of businesses are careless when they're hiring new employees because they do not do conduct adequate background checks during the hiring process. They also have lack an adequate network and do not have a reliable computer security system in place so that also plays a big factor in to why their business is victim to fraud and cybercrime.

Other frequently used strategy is where attacker targets a specific group of audience to make the scam more real, and send email to trigger to immediate response.

Fraud is an issue that causes major scandals, although it is a very ancient scheme. Recent fraud events gave light to gaps that facilitated its events. Its extent was drastic by affecting financial markets that eventually trickled into global markets. Major organizations and countries worked cohesively and continue to address the gaps and, in effect, implemented strict compliance regulations to diminish and refrain fraudulent activities. Strict compliance regulations are examples of a fraud response plan the small family business could have implemented to refrain the perpetrators from fraudulent incidents, protect organizational assets and the organization’s going concern.

The common consumer fraud is cashier’s check fraud, fictitious/unauthorized banking, high yield investment fraud (Prime Bank Fraud), identity fraud, and phishing. Cashier’s check fraud is when scammers take advantage of the trust people place in cashier's checks to steal money from your account or to prevent paying you for goods and services (OCC, n.d). It is problematic disclose fake cashier's checks. Fictitious/Unauthorized Banking is banks functioning without an authorization or contract in the United States or any other country is functioning in an illegal manner. Dishonest individuals or companies guarantee their victims enormous profits with little liability if they invest in

According to the Federal Trade Commission (FTC), there are two red flags that to warn consumers of a pyramid scheme (inventory loading and lack of retail sales). It was determined in a federal appeal court by the FTC that BurnLounge was working an illegal pyramid scheme. The decision was based on the fact that contributors had to pay to join the scheme and were mainly encouraged by recruiting others into the scheme instead of selling products. The courts did not rule that Herbalife’s commission produced from goods vended to contractors were unlawful. Unlike BurnLounge, Herbalife focused on both the recruitment of contributors and sells to consumers. The cost to join BurnLounge is an annually fee up to $429.95 and Herbalife fee is a one-time

Cheating is the basis of any scam. And the deception, as if harmless it may be, is a hoax. You can persuade people to give money. And also you can make sure that the money will flow into your pocket, so that the people themselves will carry them to you and even grateful that you've agreed to take them. This scale is a class this is a game for high stakes this is a scam. Despite the fact that during the XX century almost all developed countries have adopted laws to combat a Ponzi scheme this case is not just a living, but even thriving. An example of Bernard Madoff, who is known as the creator of the world's largest Ponzi scheme. Bernard Lawrence Madoff is the US broker, financier and investment analyst. He is best known as the organizer of

The biggest deception is the real fact that this will last and the operator will not get caught. History has shown us that these schemes will fail and even the wisest leader of these schemes eventually succumbs to greed and over confidence. In the late 1800’s a man by the name of William Miller scammed his investors into thinking they could earn 520% in one year if they invested in his business. William Miller stole close to 25 million dollars before being exposed and served only ten years in jail. One more example in recent years would be the case of Bernard Madoff in 2008 a popular Wall Street money manager. Bernard Madoff was estimated at scamming billions of dollars from his clients and leaving them with depleted bank accounts, trust funds and inheritances. Bernard Madoff was able to scam some of the most elite clientele from Hollywood and the most rich and famous around the world. Bernard Madoff obtained this money by stealing it from his customers that entrusted to him for their investment advisory accounts. The people that Bernard Madoff scammed will never be able to recover their

Scam/ fraud can be described as doing things illegally and which are not ethical, which are not good for organisation and society by effecting everyone connecting to that

Unethical marketing behaviors will cause legal troubles and a bad reputation. Here are some practices of unethical marketing, in which all should be avoided. First, Exploitation, which is using scare tactics or hard sells against vulnerable consumers. Second, Spamming which is the flooding a customer’s voicemail, mailbox, email or any other means of communication with unwanted messages. Third, bad mouthing the competition is talking down on values and benefits of your competion’s product or service . (Hunt, S. D., Chonko, L. B., & Wilcox, J. B., 1984) Forth, Misleading Advertisement and Information, which is any exaggerated claim or dishonest promise which will cause the customers to mistrust companies and spread that the product a failure.